Late 2011 saw the third review of the Three Principles on Arms Exports since their creation in 1967. How does the latest phase of review differ from the past two? Defense specialist Murayama Yūzō looks at the history of the reviews and what direction future policy should take.

The Move Toward Review of the Three Principles Gains Steam

In a speech in Washington in September 2011, Democratic Party of Japan Policy Research Committee Chair Maehara Seiji spoke about the need for the Japanese defense industry to take on a role in the international joint development and production of arms through a review of the Three Principles on Arms Exports. Thus broached by the DPJ, the issue was then taken up by the government. The administration of Prime Minister Noda Yoshihiko called a meeting in November 2011 of the vice-ministers of foreign affairs, defense, and industry to review the Three Principles on Arms Exports.

During the creation of the New National Defense Program Guidelines announced in December 2010, there was increasing momentum toward a review of the Three Principles. Given the objections of the Social Democratic Party, whose cooperation was vital to the Kan Naoto administration at the time, a clear inclusion of the review in the guidelines was passed over. However, the guidelines did call for “selection and concentration” in Japan’s defense industrial and technological base, a term used to refer to defense-related industries as a whole. This led the Ministry of Defense to form an expert panel named the Study Group on Defense Production and Technological Bases in December 2010. The panel held discussions on the Three Principles and, in its interim report in July 2011, stated that a review was necessary for the maintenance and development of the defense industrial and technological base.

Debate surrounding the Three Principles thus intensified. The principles had been changed only twice since their original implementation more than four decades ago; a new revision would be the third. It is worth noting, though, that the circumstances surrounding the current review differ from the previous two. Below I consider the history of the current review debate and attempt to envision an ideal policy course.

The Birth of the Arms Export Ban

The Three Principles on Arms Exports were created by Prime Minister Satō Eisaku in 1967. Pressured by opposition insistence on the spirit of the pacifist constitution in the House of Representatives Audit Committee, Satō crafted the Three Principles to ban the export of arms to (1) communist bloc countries, (2) countries subject to arms export embargo under United Nations Security Council resolutions, and (3) countries involved or likely to be involved in international conflicts. In 1976, Prime Minister Miki Takeo submitted a so-called Unified View of the Government to the House of Representatives Budget Committee. This confirmed the pledge “not to permit the export of arms to the countries or regions restricted in the Three Principles” and “to refrain from arms export to other areas not included in the Three Principles in conformity with the spirit of the Japanese Constitution and the Foreign Exchange and Foreign Trade Act.” The Three Principles thus became an official arms export ban.

What is likely less well known is that Japan was an arms exporter before this, shipping guns and ammunition to Thailand, Burma, Taiwan, Brazil, South Vietnam, and Indonesia in the 1950s. Small numbers of handguns for self-defense were also exported to the United States. While there was even a move to grow Japan’s defense industry into an export industry for a time, demands from the Ministry of Finance for a balanced budget and the subsequent announcement of the Three Principles put an end to these exports.

Cooperation with the United States

The review of the Three Principles took place amid rapid economic and technological growth for Japan. Motivating the review was the fact that in the latter half of the 1970s, the United States began to issue policy that called on its allies to share military technology. Related negotiations were held with Japan, which was emerging as a technological powerhouse. The government struggled to balance the Three Principles with cooperation with its US ally. Based on a framework founded on regulations relating to the Japan-US Mutual Defense Assistance Agreement, a cabinet meeting in 1983 approved the transfer of arms technology to the United States.

The Three Principles would see a further review upon entering the new millennium. Discussion regarding missile defense began between the United States and Japan in the early 1990s. Cooperation took shape after the North Korean missile test in August 1998 in the form of the Japanese government’s official approval of Japan-US cooperative research into ballistic missile defense technologies in December 1998. This research would eventually reach the stage of joint development—this while the US development and production of a missile defense system shifted to an international scale. For Japan to continue to play a role in the American BMD program, it had to accept the possibility that Japanese-developed components might be exported.

In response to these structural changes, Tokyo decided in December 2004 to contribute to both the effective operations of the bilateral security arrangements and the security of Japan itself. The official exclusion of BMD from the Three Principles was announced in the form of a statement by the chief cabinet secretary. Japan would discuss and form positions on individual issues, including joint arms development and production with the United States and antiterrorism and antipiracy measures.

A Decline for the Japanese Defense Industry

Having looked at the formation and past reviews of the Three Principles, I now turn to the ongoing third review. The focus on the effective operation of Japan’s bilateral security arrangements with the United States played a large role in past reviews, with efforts made to balance the preservation of Japan’s spirit of pacifism with the maintenance of the alliance.

However, compared to past reviews, domestic factors are much more in play in the current debate.

The New National Defense Program Guidelines announced in December 2010 newly issued the concept of a “Dynamic Defense Force” in addition to the existing “Basic Defense Force.” The aim was to create a defense system capable of responding immediately, seamlessly, and effectively to contingencies, given the heightening tension in the security environment of the Asia-Pacific region. Building this kind of system would of course require the support of the Japanese defense industry.

But the industry was faltering. In the 20 years from 1990 to 2010, total contracts for principal defense equipment fell from ¥1.727 trillion to ¥683.7 billion, and the reorganization of defense industries seen overseas following the Cold War did not take place in Japan. As a result, the reduced amount of contracts for defense equipment began to be split by a large number of companies. Profitability for defense-related businesses declined, and smaller companies that supported the technological base were forced to exit the market, pushing the Japanese defense industry closer to crisis.

Despite this, the existence of the Three Principles would not permit Japan to take part in the international joint development and production of arms that is now commonplace. The growing need for the enhanced development and international transfer of equipment used in Japan’s expanding role in antiterrorism, antipiracy, peacebuilding, and peacekeeping operations gave rise to renewed calls to review the Three Principles.

Properly Framing the Review Discussion

While the strengthening of Japan-US security relations continues to play a role in the current discussion, this time Japan’s domestic conditions are a greater factor. What is therefore required is a deeper discussion of the state of defense technology development in Japan, Japan’s efforts against international arms proliferation, and its role on the international stage.

I believe it is worth first identifying truly “defensive” technology and equipment used both for security—in the form of antiterrorism efforts, peacebuilding, and disaster response—and by the military. Technological development should then be enhanced and the Three Principles relaxed to freely recognize exports in this area. A review of the Three Principles and a shift to the development of truly defensive technology is in line with Japan’s basic policy of a purely defensive military. It would also allow Japan’s technological strength to be directed toward activities listed in the new defense guidelines like humanitarian support and disaster relief, peacekeeping, antipiracy efforts, and human security. Enhancing controls for exportable technologies to strictly scrutinize export destinations would also prevent weapons proliferation caused by a review of the Three Principles. This would result in technological development that supported Japanese security and allowed Japan’s self-promulgated identity as “a nation based on the creativity of science and technology” to extend to the field of security.

In a meeting of senior vice-ministers held on December 12, 2011, on the review of the Three Principles, the participants are believed to have solidified a position exempting participation in peacebuilding and humanitarian missions and international joint arms development and production from the Three Principles. Current review discussions should not only focus on exceptions to the Three Principles but also actively take a hard look at Japan’s own security.

(Originally written in Japanese on December 13, 2011. Photographs provided by the Ministry of Defense.)

Note from the Editors: On December 27, 2011, the Security Council of Japan met at the prime minister’s office, reaching the official decision to relax the Three Principles. New standards were created to recognize exceptions to the principles for the purpose of supplying equipment for international joint development and production, peacebuilding, and humanitarian missions, and a report was made to the cabinet. Chief Cabinet Secretary Fujimura Osamu announced the decision at a press conference the same day.

Professor at Dōshisha Business School, where he was also dean from 2009 to 2011. Member of the Ministry of Defense Study Group on Defense Production and Technological Bases. Born in 1953. After majoring in economics at Dōshisha University, he earned his MA and PhD in economics at the University of Washington. He has also been a researcher at the Nomura Research Institute Economic Research Department and an associate professor at Osaka University of Foreign Studies. He specializes in corporate social responsibility, economic security, technology policy, and cultural business.
His works include Keizai anzen hoshō o kangaeru (On Economic Security; winner of the Japan Association for International Security Katō Prize) and Tekuno shisutemu tenkan no senryaku (Strategy of Techno-System Transformation; winner of the Fujita Future Management Prize).